Corn Climbs as USDA Forecasts Higher Corn Usage
By Kirk Maltais
--Corn for July delivery rose 1.2% to $6.99 a bushel, on the
Chicago Board of Trade Thursday, in reaction to the USDA
forecasting higher corn consumption in its latest monthly supply
and demand report.
--Wheat for July delivery fell 0.2% to $6.83 3/4 a bushel.
--Soybeans for July delivery fell 1.2% to $15.44 a bushel.
Coveted Corn: The USDA says that it expects usage of U.S. corn
to grow from previous projections, amid higher expectations for
consumption by the world export market as well as the domestic
ethanol market. "Beginning stocks are down 150 million bushels
reflecting projected increases for 2020/21 in corn used for ethanol
and exports," the USDA said in today's WASDE report. "Corn used for
ethanol is raised 75 million bushels based on the most recent data
from the Grain Crushings and Co-Products Production report, and
weekly ethanol production and refiner and blender net inputs data
during May which indicate demand is almost back to levels seen
prior to Covid-19." Meanwhile, the USDA opted to leave its
production forecasts for 2021/22 unchanged.
WASDE'S Wake: On the supply side for world corn, weather
difficulties in South America appear to be a factor spurring some
trader excitement post-WASDE report. "We now see a tighter
situation in the corn from South America and a much more ample
supply building in the soy. The market has reacted as such," said
Michael Zuzolo of Global Commodity Analytics. According to the
USDA's latest estimates, Brazilian corn production is expected to
fall from last month's projections, to 98.5 million metric
Stocked Up: After the WASDE's release Thursday, the most-active
soybean contract fell in reaction to higher ending stocks
domestically and globally for soybeans, said Terry Reilly of
Futures International. According to the USDA, 2021/22 soybean
ending inventories are expected to rise to 155 million bushels, up
from forecasts from analysts surveyed by The Wall Street Journal of
139 million bushels. Meanwhile, world stocks are expected to rise
to 92.55 million metric tons in 2021/22, up from forecasts of 91.6
million tons by analysts.
All About The Weather: Although CBOT grains futures are being
moved by the new forecasts released by the USDA, it's expected to
quickly dissipate, said Craig Turner of Daniels Trading. "I don't
see any limit moves today after this report or a change in trend,"
said Mr. Turner. "The market will reprice the CBOT according to the
ending stocks and stock/usage ratios and then we go back to trading
the weather tonight." Cooler temperatures and isolated rainfall is
seen moving into U.S. crop-growing areas, according to DTN.
Healthy Crop Ahead: Spring wheat growing in Ukraine - which
along with Russia is the leading area for wheat sold into the world
export market - looks to be in for weather that's supportive for a
healthy crop, said Marex Spectron. Rainfall and mild temperatures
are forecast there for the next 10 days, and rainfall in prior
weeks has been healthy, according to the firm. "The current
environmental conditions suggest that we will see improved wheat
yields in Ukraine for 2021/22, but there is the possibility that
drier weather conditions during the time of planting and the
forecast for drier and warmer weather for the start of July could
have a slight impact on yields," said Marex Spectron.
Export Erosion: Export sales of U.S. corn were reported this
week much lower than forecast by grain traders surveyed by The Wall
Street Journal. Across the 2020/21 and 2021/22 marketing years,
corn sales totaled 216,000 metric tons, the USDA reported in its
weekly export sales report Thursday. This total is well below
expectations, with traders looking for anywhere between 400,000
tons and 1 million tons. Japan was a leading buyer of U.S. corn
this week, purchasing 203,700 tons of 2020/21 corn - with 199,900
tons switched from being previously designated as sold to unknown
destinations by the USDA.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
--The USDA will release its weekly export inspections report at
11 a.m. ET Monday.
--The USDA will release its weekly crop progress report at 4
p.m. ET Monday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
June 10, 2021 15:29 ET (19:29 GMT)
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